Taco Bell Parent to Develop Digitally Integrated Restaurant Formats Across Brands

After months of rapid innovation with Taco Bell store designs, the restaurant’s parent company, Yum! Brands, is looking to bring a similar approach to its other chains — KFC, Pizza Hut and The Habit Burger Grill. On a call with analysts on Thursday (Oct. 28) discussing the company’s third-quarter results, Chief Financial Officer Chris Turner shared the company’s plans to integrate new technologies into physical stores.

“Not only are we seeing strong development across our brands, but given the continued strength of digital and off-premise growth, our teams continue to evolve the asset types being developed into more digitally enabled formats,” he said.

As an example, Turner highlighted Taco Bell’s Go Mobile design, announced in the summer of 2020, which includes a drive-thru mobile order pickup lane and a smaller-than-average footprint, among other features. Twenty-three such locations have opened throughout 2021.

Turner stated that these digital integrations “have been a big hit” and that the concept is “primed for digital growth.” He added, “We have similar examples in other brands.”

In fact, PYMNTS research finds that restaurant managers underestimate the importance of the drive-thru channel. Research from the 2021 Restaurant Readiness Index, created in collaboration with Paytronix, finds that 40% of consumers believe the ability to pick up orders at the drive-thru will be important to restaurants’ future success, while only about a quarter of managers believe the same.

Read more: NEW REPORT: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation and Sales

Still, though managers may on average be underrating the importance of the channel, there is steep competition among leading QSRs to provide the drive-thru experience of the future. McDonald’s recently announced that it is partnering with IBM on automated voice ordering technology, while Burger King parent company Restaurant Brands International has been developing Bluetooth-enabled drive-thru digital signage that identifies loyalty program members as they pass by, displaying the member’s favorite foods and beverages on these menu boards.

While the Go Mobile concept is more or less in line with broader industry trends, other Taco Bell formats that have been announced in 2021 are more envelope-pushing. In August, the QSR revealed its Defy restaurant design, a four-lane, mobile-integrated drive-thru where orders are sent down from the kitchen through a food elevator. In the spring, it opened a fully digital store in the middle of New York’s Times Square, offering a self-guided experience with ordering kiosks and pickup cubbies. If Yum! Brands takes this playful and more risky approach to KFC and Pizza Hut designs, the in-store experience could look significantly different in years to come.

See also: Taco Bell Restaurants Will Keep Getting Smaller, Says COO

This innovation-focused approach could be key to restaurants’ performance in 2022, with digital sales only continuing to rise, even from their mid-lockdown highs. On the call, Yum! Brands CEO David Gibbs stated that by July, the company’s year-to-date digital sales in the U.S. had already exceeded the company’s full-year 2020 digital sales. Globally, digital sales surpassed $5 billion in the quarter and accounted for almost 40% of all sales.

Related news: Restaurants Move Toward More Automated, Personalized Drive-Thrus

“From Q2 to Q3, we did see a return to dine in,” said Gibbs. “Yet we saw digital sales go up, and we saw [the] digital mix go up, which is proving that not only is it sticky, but it’s still something that’s going to continue to grow for us.”